Lost savings interest - warning

fruitstick

I've posted this in another thread but thought I would put it here as a warning to others.

We sold our house last year and were forced into rented.

I split the money between various savings accounts and opened a Sainsbury's Savings account at 3.3%. I understood that you couldn't make any withdrawals otherwise the interest rate would go down to 0.7%

However, I went to close the account today (the 12 months bonus was up) and had only been paid less than £500 interest, not the £3,500 I was expecting.

Apparently this was because the limit on the account was £100,000 and I had mistakenly put in £110,000. Apparently if you exceed the amount the interest plummets on the whole amount.

They didn't inform me that I had exceeded the limit, or that my interest rate was going down, and there was no way of knowing that this had happened until the interest entered my account 12 months later.

:mad:

Now I'm sure it was in the small print somewhere but do I have any redress at all! I would have expected them to close my account or refuse the transfer if it exceeded their limits - not just choose not to pay me the interest. :mad::mad::mad::mad:

ukmike

You put in £110,000 when the compensation limit is £50,000?

fruitstick

It was a joint account, so £50,000 each.

ukmike

Still risking £10,000 though.

fruitstick

Thanks for that. Like I said in my post. I MISTAKENLY put £110,000 in instead of £100,000.

But thanks for the advice, that's really helped.

oldfella

I presume its the online saver ..
T&Cs say "If you make 4 or more withdrawals or your account falls below £1,000 or goes above £100,000, during the 12 month period, the standard Online Saver interest rate will apply from the date of your 4th withdrawal, or the date your account falls below £1,000 or goes above £100,000 (whichever is earliest)"

So they should have paid you the full rate up the date you went over £100,000. Otherwise they are following the T&Cs which they will argue you should have known about.

So, I am sorry but put it down to experience.

Sceptic001

Nevertheless, reducing the rate on the entire balance if a maximum is exceeded is quite unusual. Was this condition of the account clearly explained in the Key Features? If not there may be some case for complaint.

fruitstick

I'm not sure to be honest (it was a stressful time!).

I don't think it was because I was very sure that the rate would be reduced if I made withdrawals so this must have been in smaller print than that.

I'm going to complain anyway, can't do any harm but I'm not holding my breath.

Jake'sGran

Sceptic001 wrote: »

Nevertheless, reducing the rate on the entire balance if a maximum is exceeded is quite unusual. Was this condition of the account clearly explained in the Key Features? If not there may be some case for complaint.

I don't think it is unusual as I have seen it on a few bank/bldg society sites.

Banks seem to make a lot more "mistakes" these days compared to how they did things a few years ago. They could have advised you. Right now I am awaiting compensation from the Leeds BS for their poor handling of a new ISA.

Send full details of the problem you have experienced to Diana Wright in A
Question of Money in The Sunday Times. She is brilliant at getting these financial institutions to play fair. It is always possible that as you didn't spot
the £100,000 condition at the beginning she might hit a brick wall but it's worth a try.

Doctor_Gloom

ukmike wrote: »

Still risking £10,000 though.

What risk? No-one has lost money held in a savings account. Or ever will either.

Doctor_Gloom

fruitstick wrote: »

Apparently this was because the limit on the account was £100,000 and I had mistakenly put in £110,000. Apparently if you exceed the amount the interest plummets on the whole amount.

It sounds like a right con to me. They should have at least paid you the full interest rate on the £100K. Paying you a low interest rate on the other £10K might be legitimate. I'd threaten to take them to the Financial Ombudsman. Make a complaint about it.